SEC Chairwoman Schapiro on Regulation

The new chairwoman of the SEC Marie Schapiro, speaking at the annual conference of the Society of American Business Editors and Writers on Monday, named some causes of the financial crisis.

Floyd Norris has emphasized the two parts he found most interesting from her speech:

How we got to where we are today is a question that many will debate for years to come. But it is clear to me that the responsibility lies with many:

• from the institutions that cobbled together and aggressively sold risky financial instruments
• to ratings agencies that allowed the integrity of ratings to take a back seat to their business interests
• to mortgage originators who made complex loans to those who could not afford them
• to regulators that didn’t fully embrace the need for regulation or didn’t appreciate the significant risks building throughout the entire system
• or, in the case of the S.E.C., simply didn’t hew faithfully to the mission of investor protection — whether because of a lack of resources or because of philosophy.

While the high level of risk involved for the next several Qs for the investors and the US economy is difficult to discern, in terms of what the primary fundamental driver for the world’s most powerfull economy will be going forward, to have at least an S.E.C. run by someone who sees regulation as a positive element is (using Norris’ term) “refreshing.”